Viacom CEO Redstone Is Down but Not Out

Media mogul Sumner Redstone was supposed to be in China this week, meeting with President Jiang Zemin about expanding the reach of his company’s MTV and Nickelodeon cable networks.

Instead, Redstone, the 78-year-old chairman and chief executive of Viacom Inc., is in Los Angeles recuperating from two broken ribs and a collapsed lung after slipping on the bathroom floor of his Manhattan apartment.

“They can’t kill me! Anyone who wants to get rid of me, forget it,” Redstone joked during a chat in the presidential suite at the tony Hotel Bel-Air.

Redstone, who in late February had three liters of blood drained around a punctured lung, said he was now “feeling great,” although he had grudgingly taken his doctor’s advice not to travel abroad.

“I hated to say no,” said Redstone, who was looking forward to a follow-up visit to China.

In March 2001, Redstone was in Beijing to sign a three-year deal to launch Nickelodeon in 40 million Chinese homes. “Today that number is 85 million,” Redstone said.

Viacom’s first channel to reach China was MTV in the late ‘90s. MTV is now seen in 85 million Chinese households, Redstone said, up from 52 million a year ago. Because China has 300 million TV-watching households--three times the number in the U.S.--he believes that the Chinese market has huge commercial potential.

Although Redstone says he was in extreme pain after his fall, the next night he traveled to the White House as planned for a screening of Viacom’s new Mel Gibson film, “We Were Soldiers.” Among the guests were Gibson, Viacom Entertainment Group Chairman Jonathan Dolgen, Viacom President Mel Karmazin and Secretary of State Colin L. Powell.

In mid-February, Powell appeared on MTV to talk about various subjects as part of Hollywood’s effort to support the Bush administration’s war on terrorism. In November, Redstone had suggested that Powell appear on MTV at a meeting in Beverly Hills with top entertainment executives and President Bush’s chief political advisor, Karl Rove. MTV chief Tom Freston then arranged the Powell broadcast, Redstone said.

Analysts speculate that Freston could be part of a management troika--including Dolgen and Leslie Moonves, head of Viacom’s CBS Network--that may run Viacom if Karmazin leaves when his contract expires at the end of 2003.

Redstone and Karmazin have had a clash of egos since Viacom bought CBS two years ago. Karmazin was chief executive of CBS, and he has operating control of Viacom until his contract expires. In January, Viacom’s board ordered Redstone and Karmazin to reconcile their differences in the interest of the company.

“Mel and I have agreed that this year we will be focused entirely on driving the company’s business and driving the stock, and we will not discuss the future until the end of the year,” said Redstone, who refused to say more on the subject.

Another executive who has received more attention recently is his daughter Shari Redstone, 47, who sits on Viacom’s board and runs its closely held parent company, Boston-based theater circuit National Amusements Inc. When asked what future role she might play, Redstone said, “She will be more involved in the business affairs of the company.”

Redstone praised his daughter’s management skills. National Amusements has remained healthy while most of its major theater chain rivals have filed for bankruptcy protection after a period of overbuilding massive multiscreen theaters.

That said, Redstone insisted, his daughter will not run Viacom.

“She is not interested, nor am I, in her being CEO of Viacom,” he said. “I believe in professional management, not family.”

Why are the two mutually exclusive?

“That’s an interesting question,” Redstone said.